Celtic PLC interim report

Ok then also pays for a top bracket player


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So as was shown in the accounts here, trying to predict the final cash balance at year end is very tricky as we don’t know:

- is that the Barrowfield project paid off now or is there still some more capital spend to come?
- As @Blochairnbhoy mentions any future transfers? Also how much we actually got for Bernabei upfront and Kyogo as well as how much we paid for Jota? There was figures from £5.5m to £9m kicking about for Jota and Kyogo was either £10m or €10m (£8.6m).
- is there any other capital projects on stadium or Lennoxtown?
- How much of the CL money has been banked in terms of the TV revenue from the European and rest of world pillars?
- Will we trigger any add ons we need to pay or will our players sold trigger any add ons/ sell ons due?

So all of the above will have a material impact on final cash position. I would like to think it would be back up in the region of where we were last summer at least.

My hunch about paying transfer fees up quicker and being more patient with fees due to us, comes from the following -
- In the next 12 months we are currently due in around £1m more than we are due to pay out (current receivables - current payables)
- Payments due to be received beyond 12 months compared with payments to be made we are due £20m in and pay out £11m so £9m profit. So taking all things we are due vs all we have paid we have a positive balance of £10m.

Now the above is more than transfer fees but it is reasonable to assume one of our biggest and most frequent transactions are transfer fees, both in and out.

When you look at the adjustments in these figures the current ones have a similar differential to last years position but the future differential has grown from a £2.5m gap to a £9.2m gap. So we are essentially paying people quicker and willing to be patient in receiving what we are due.

On the £21.5m profit on player sales, I admit that I was expecting that to be closer to £25m. I know they listed a number of sales but the ones that are doing the work in that figure is Matt O’Riley, Mikey Johnston and Bosun Lawal as those are the deals where we made profit. So that figure is profit not sales value. Now Johnston had no transfer fee so anything received for him should be treated as profit, it would seem we have not received £3m upfront for him, Lawal cost us a development fee £150k and Watford would be due a small % of his development fee as a defacto sell on but again it seems like we didn’t get £2.2m upfront for him. Matt O’Riley we know there was a sell on to Mk Dons and he signed a new deal so although we only paid £1.5m for him most of that would have to be amortised when he was sold so taken off profit figure. Therefore his contribution to that figure may have been as low as £18m not the £24-26m fee we received. Alternatively, the upfront fee to add ons ratio for O’Riley could have been lowered upfront and more add ons. This part is very difficult to unpick as fees are undisclosed and contract terms of purchases and sales are unknown.

However, the reason I am confident we are being patient to be paid is the figure in the cash flow called proceeds from intangible asset sales is £17m but our trading position as highlighted above shows that the gap between what we are due to receive and what we are due to pay out has grown significantly from the last January and the summer where that balance was about £2m and is now standing at £10m. I would suggest the reason for that is largely down to us making a profit in our summer transfer window. Probably not the full £8m growth but a sizeable proportion of that.

Essentially our figures in that set of accounts are designed to show we have invested in the team to the tune of £30m and capital projects this period of £8.5m and over the last 18months capital project spend of £17m+.

It also does a job showing that this has grown the asset base of this football club both in terms of physical infrastructure and intangible assets (players) by a combined total of £26m since the summer accounts of which the squad value has gone up by £19.5m.

Where I might not be confident in predicting the bank balance by the end of the season, I am confident final revenue will have increased to approx. £135m come the end of the season, costs will be up too (I would guess £112m) though, transfer profit will be up to about £25m. Final profit will be higher than last year as well, pre tax ~£23m vs £17m last year. Post tax £17.3m this year vs £13.4m last.

The drop to the 6 month figure is an anomaly of when CL revenues are paid due to the new league phase concluding in January instead of December.

 

We might factor in whatever KT signing fee is in the year end accounts too to reduce profit!

 

I don’t think that will happen mate as he will be contracted to Arsenal until the 1st of July so that would be next period.

Also that wouldn’t impact profit as wouldn’t feature in the P&L.

 

Ah fair enough then just thought i remembered Dembele and Toure signing fees in as player purchase in 2016 maybe not

 

I am not an expert but I wouldn’t have thought we could do that as he is still an Arsenal employee.

Unrelated but we should be able to claim considerable capital allowance on the Barrowfield project given it is a capital investment. This would allow us some tax relief which effectively means money we would have had to payout on tax is offset by having invested in that project.

 

Yeah defo major capital investment to offset against corp tax.

Still think we could make a significant signing before 30th june to further reduce profit and CT liability

 

Pretty much what @Foley1888 has said think everyone expected a higher cash balance

 

Essentially it does look like we got in the ball park of fees that were reported for the players and brought in at least £36m overall but we have accepted payment terms for fees due to us that split fees into even instalments and at that point in time had only received less than half we are due (as shown on trade balance of the balance sheet).

Things I would expect to see in the full year accounts are:

- Multimedia and commercial revenue to make up that gap to last year and then some. If we win the Scottish Cup and see the league over the line, I think that might be in the £50m ball park.
- we will have played 29 games at Celtic park this season by the end of the year, the most we have for a number of seasons given no Euro qualifiers but we have had 5 home cup ties. If we win the Scottish Cup, I would expect football and stadium operations revenue to be our all time high as well. Add in a knockout tie vs Bayern and it wouldn’t surprise me if that hit £55m
- merchandise was slightly down at mid year but only by £200k so I would expect that to finish within £500k of last years figure. So within £29-30m.

 

Jota 7 sales will take care of the shortfall

 

Just about to say that auld @Peter T. Lawwell Esq seen the shortfall and signed Jota